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Sagelinka writes "Both Google and the Chinese government appear to be leaking word that the search firm may soon shutter its operations there as negotiations between the two break down. Google first threatened to halt its operations in China after disclosing in January that an attack on its network from inside China was aimed at exposing the Gmail accounts of Chinese human rights activists. At the time, Google also said it was reconsidering its willingness to censor search results of users in China as required by the government. 'I think Google thought China would be flexible,' said Rob Enderle, an analyst with the Enderle Group. Google has since been negotiating with the Chinese government to find a way to continue operating in the country. Google did not respond today to requests for comment on the state of the negotiations with China."

It seems to me that they were looking for an excuse to leave, and the hacking provided exactly that.

Don't know about that. China's got millions and millions of potential Google users in a fast developing market. Google probably wanted to be there and wanted to stay, but not on the (probably unfair) terms of Chinese government.

My uninformed opinion about this is that Google made the deal in the first place because they recognize the difference between the Chinese government and the Chinese people, and after doing the calculus on it they reasoned that the overall benefit to the people was worth dealing with the government's rules, provided they didn't get too overt with it. I'm sure they also figured into it: once the people get a taste of a great search engine, and it gets taken away, they know what they're missing. If Google nev

It's not like Google doesn't have to obey US laws, including censoring, either. It's just a different thing what's being censored - in US it's censoring search results based on DMCA notices. It's censoring and removing search results based on laws never the less.

I see the point you're trying to make, but the difference between censoring a mash up of Smurfs and StarWars on YouTube and blocking access to human rights organizations is like the difference between me saying your momma is fat versus raping her.

Eyewitness reporter Charlie Cole believes that the man was taken away by secret police and was just one of the many executed in the aftermath of the military crackdown, since the Chinese government was never able to produce him after the images became public.

No, he wasn't run over, he was made a nonperson [wikipedia.org]. That doesn't make me feel any better about it.

China just wants to control everything because there nation is developing faster then they anticipated.

You mean like when they tried to control everything during the Great Leap Forward by killing and jailing hundreds of thousands of people? Killing all of your scholars really helped make the nation develop slower.

Sorry. Re-reading my statement it seems that I was too quick to submit -- that's not quite what I meant to say. And the result is that the comment got modded as a troll.

I don't have a reference or any reputable source -- only an inkling or gut feeling.

What it comes down to is Google stopped censoring results (admitting that google.cn will probably be shut down) because of a hacking attempt. This reasoning always seemed a bit dubious to me.

Google doesn't have many ways of getting back at the Chinese government: refusing to censor is one of the few. More to the point is that it provided a means to make waves in China: "If you're not going to play by the rules, neither will we!"

So, yeah. Maybe an excuse to "leave" isn't quite what I should have said. Let me edit my statement:

It seems to me that they were looking for an excuse to threaten to leave.

It seems that Google can't win. Either they make a deal with the devil as SputnikPanic puts it, or they behave ethically and attract savage criticism from armchair quarterbacks everywhere.

Google has a corporate culture of idealism, no doubt fed by the youthfulness of its top executives and much of its staff. Beyond that, they have traditionally been a good corporate citizen, giving a lot of their work back to the community by open sourcing it.

They created the Android phone operating system to be an open alternative to the various proprietary systems. Anyone can take it and run with it. A whole menagerie of excellent smart phones has emerged with Google technology at their core.

Almost all of Google's apps--search, email, scholar, news, maps, voice, and on and on--are free to use, usually in exchange for mild ad text and aggregated use data.

Google gets it. They do things right. They reward innovation, they encourage creativity. They are the epitome of a great American company.

Therefore, to top off their greatness by refusing to deal with a censoring, dissident-hacking corrupt communist-only-in-name dictatorship is both admirable and gutsy and uniquely American. If only all American companies operated on principles rather than pure greed, think what a better society we would have, and a better world.

I feel duty-bound to support Google in whatever ways I can. Right now it's my Nexus One phone, my gmail, and when I have some spare cash I'll buy a few shares of stock. Go, Google! Show those arrogant turds that at least a few Americans still believe in freedom over profit.

So essentially they'll be turning the clock back to 2006, where the Chinese had access to the unfiltered, international version of Google and were more painfully aware of its government's censorship effects.

I'm mostly interested in how much Google actually follows through on their threat. It would still be an in

Google is a "very valuable tool" for citizens' discontent with the government.

Not after Google complies with the demands of the Chinese government.
That seems to be the part that you're not getting.

Google cannot win (i.e. help people more than Google has in the past).
Google cannot stay even (i.e. help people the same amount as Google has in the past).
Google can only capitulate to evil (i.e. help no one but the Chinese government) or leave (i.e. help the Chinese government).

Google is boxed into helping the Chinese government either way, but one way requires compliance with evil and the other does not.

Google cannot win (i.e. help people more than Google has in the past).Google cannot stay even (i.e. help people the same amount as Google has in the past).Google can only capitulate to evil (i.e. help no one but the Chinese government) or leave (i.e. help the Chinese government).

Google is boxed into helping the Chinese government either way, but one way requires compliance with evil and the other does not.

Man, if only that were true, then it'd be great that Google is pulling out! Too bad it isn't.

Google cannot bring True Democracy (tm) and Complete Freedom (tm) to China. They also can't give everyone a pony. Does that mean they should just take their ball and go home?

Tell me, why can't Google "win"? Why can't Google "stay even"? And how, exactly, is staying in China "capitulating to evil" and "helping no one but the Chinese government"?

You parrot the old Google party line about why they stayed in China for so long pretty well.

But Google seems to be changing its line, albeit somewhat grudgingly. One might conclude that they were rationalizing the decision to stay where the money was even though they had to knowingly act against their stated values to do it; later found that you get burned when you shake the devil's hand; and now are trying to reconcile that with the fact that really they do still want access to all that money.

One might otherwise conclude that they were doing much good by staying, but the PR problems of the West unexpectedly and hypocritically blaming them were just too much for them to handle.

You seem to be implying that I'm some sort of Google apologist. I'm not. I'm just someone who wants to use Google, but soon won't be able to, since people like you seem to think your right to feel self-righteous outweighs my right to use a quality search engine that tells me when it censors results, and fights the Chinese g

You read my mind. "Do no evil" is a good mantra for Google, but it also means they will lose business in China, and somebody else will gain a virtually monopoly as the "default" search engine - namely Microsoft. So come 2020 we'll have a divided world where Google is the #1 search engine in America/Europe and MS Bing will be #1 in China and its protectorates.

It's like reading a prequel to Firefly.

IMHO Google would be better off to enter the Chinese market and gain dominance, and then *gradually* bring m

Someone else is already a virtual monopoly in China. Baidu is by far and away the most popular search engine in China and even Google is essentially an also ran, while Bing and Yahoo are barely above the level of being statistical noise.

I agree with the "somebody else" part, but if you think the chinese gateway to the Internet (which is what a search engine is these days) is going to be any company not directly under the thumb of the chinese government...

You read my mind. "Do no evil" is a good mantra for Google, but it also means they will lose business in China, and somebody else will gain a virtually monopoly as the "default" search engine - namely Microsoft. So come 2020 we'll have a divided world where Google is the #1 search engine in America/Europe and MS Bing will be #1 in China and its protectorates.

No, Baidu will be the default search engine. Oh, but wait it already is!

It's not as if Google didn't try to dominate the market in China, but the go

I wouldn't think twice sending that patient to another doctor.
If they're dumb enough to demand an unnecessarily high-risk procedure, I'd advise them against it and offer the alternatives, and if they still wanted it, I'd explain why I wouldn't feel comfortable offering it to them.
I agree, the shitty doctor who is willing to perform it may cause more harm. But, the patient is bent to be massacred in one way or another anyway, and at least I won't be the one who gets his ass dragged to court trying to defend myself on why I performed a procedure that goes against all clinical and ethical guidelines and clearly fails the Bolam principle.

There's a reason BIDU hit $630 yesterday having only been $100 a year ago and it's not because Bing will be taking Google's place.

I can't see Google withdrawing because they'd be handing what will be the world's biggest market over to a competitor. The free speech situation would also become worse with BIDU as the main search engine since they'll be far more inclined to do exactly what the government tells them.

It makes no sense financially or socially so Google would have to be completely stupid to pull

2) When trying to dilute negative actions by the government on a per capita basis, like how they claim to be very environmentally friendly on a per capita basis.

I do find it humorous all the people mentioning that Bing(MS)/Yahoo will go as they have no morals, I wonder how many read about the story in angst while using products wholly or partially made in China.

Much of China is undeveloped. While many are moving to urban areas and earning a wage, many wouldn't have what we would describe as "disposable" income.

There are a new class of people in China that can certainly afford "stuff", however that number is much much less that the total internet users (though growing).

Google has also shown that it can break into well established markets and be successful.

Thus I am of the opinion that Google is not in a great big hurry. If I was Google I would play hardball as well. Perhaps down the road it will give you a favorable bargaining position.

Until Chinese start buying products at a fair market value (there is a reason why software in the USA costs 250$ and in China 13$), who exactly are you advertising to, and how can you make any money off of them? I mean if it takes 100 clicks on a link to sell one copy of software at 250$ then that service is worth X. If it takes 10,000 clicks on a link to sell one copy of software at 13$ then that service is worth Y. It is a rather simple equation. Now take a tally of all the X's and all the Y's and subtract that from what it cost to actually provide that service. If you get a negative number for Y, or a number so small in comparison to X, then basically you don't really care all that much one way or another. The only exception would be for "future considerations", basically start market penetration now (which will cost little), and in 10 years or so it might pay off. Of course if your Google, you can also leverage the fact that most of the known world uses your product, and if you keep it up, hopefully in 10 years that won't change, in which case penetrating that market down the road might not be that big a deal anyway.

It will happen, its just many years away is all, and Google need not bend over backwards simply to enter into a market of little value now in the hopes that one day it will work out.

It's not just about the market - it's also about the risks.
If they stay in China, sooner or later the Chinese government will gain full access to their servers (either by hacking or by confiscation), and with it all the information they want. Plus the search algorithms.

"I think Google thought China would be flexible," said Rob Enderle, an analyst with the Enderle Group.

My opinion is that the CEO, Eric Schmidt [google.com], differs from the young idealism of Larry Page and Sergey Brin. I do not mean that either side of this leadership is right or wrong but instead simply that they have different motivations. Brin's past has come up before [slashdot.org] as a source for this (seemingly) new found anti-censorship campaign.

Google's leadership is conflicted. Brin & Page see the ethics of the situation most important because their motivation seems to be less devoted to money. It certainly seemed to be an exercise in indexing when they started "Google." Schmidt, however, owes his allegience to the shareholders. Or at least feels the pull and responsibility of profit more so than any sort of ethical dilemma. And that's why he was put in that position: to keep investors investing. And, honestly, this last point is why I think this 'removal' is nothing but a rumor or a bluff. Because money is one of the most important things to Google. I don't think the young idealism will stand up to stock prices... and I think everyone involved knows it. Until you tell me that Google.cn is dead and I go to the site and confirm it, I will not believe for a second this is possible.

Brin and Page's cashing out [slashdot.org] is really just symbolic of what's already happened at Google. Their motivations are like any other company's. Some of it is about the customer and some of it is about profit... and that's it. Pesky ideals and ethics have no place in corporate America. Step aside. It's the safest path to churn out tons of cash. They're walking away from too much money and market to pull out of China. It would be bad for stocks and any investors would flip out... probably even sue.

Could a lawsuit have merit when Google's motto is do no evil? It is clear that their presence in China was creating harm.

On another note, I agree that google.cn will not be going anywhere. If nothing else, it would be a big FU to China to leave it as is but remove all censorship. Heck, pulling it might be construed as surrendering to censorship and therefore evil.

Interaction is a good thing. Google opens the world up to China much better than China based Baidu. From there Chinese people get access to a wider range of views and opinions. They have greater contact with europeans and americans so they can see more opinions. They can realize more effectively that people aren't out to get them. Even though censorship is bad nothing is clearly more censorship.

The best solution would be for Google to poke holes in China's wall... repeatedly. Automated English ->

What money? People keep talking about China as if it is some huge source of profit for google. It is not. Google has a few side startups but its main business, advertising is NOT present in China. There are some chinese advetisers but they advertise OUTSIDE China.

The amount of revenue is around 300 million dollar. A pathetic amount and that is revenue, not profit.

The MBA's have long since declared China as some kind of holy grail, were the streets are made of gold and profits just happen. But it just ain't turning out that way.

For europeans, the US of A was much the same. Oh if we can only launch our product over there, we will have it made. Forget, if you are big in Holland then a flea can squash you in the US. You are nothing. Do 10 miljoen euro's and you will be a tiny blip as a Humvee drives over you. Conquer the german market, go south to france. Not instantly across the ocean, with insane transportation costs, gap in working hours, cultural differences.

Google did have long term plans for China, but they might be wondering that with the little result so far, it is actually worth the hassle.

And I think China might be bluffing as well. If Google moves out, they might not loose all that much, but others could start to examine their own future in China.

In itself, it is not unusual for a company to rethink its activities in a region.

Yes, China has a Billion people, but that doesn't scale the same way as a Billion US or European consumers would. There's HUGE cultural and economic gaps. This is why they're making all our cheap crap... they've got abysmal conditions for labor and can pay their workers a pittance. Sure, those conditions and that money is probably a BIG STEP UP over how many were living, but it does not equate into a billion people suddenly buying dishwashers, TVs, washers, driers, and other goods. Besides, even if it did, they're probably going to buy cheap Chinese-made crap anyway.

I had a point in here somewhere... Oh yeah: Someone once told me that when "they" declare a gold rush, be the one selling the shovels.

I think that there are a lot of clever people selling shovels (getting rich sending business to China or making money off businesses who think their futures are in China), and a lot of not-quite-as-clever folks mining for gold (looking to make fortunes by doing business in/with China).

Maybe Google is starting to add up the cost of doing business there and has realized that they were on the wrong end of that equation.

Google wins twice: 1) they stop spending money and taking (security and financial risk) on a losing proposition, and 2) they get a big public relations boost for standing on principles.

Don't get me wrong, I've got nothing against the Chinese people... I'm just saying (as the parent post said) China is nowhere near the business-paradise that many folks seem to think it is. There are different cultural, economic, and government forces at work than in the West, and anyone who thinks they can just waltz in there is falling victim to magical thinking:

Schmidt, however, owes his allegience to the shareholders. Or at least feels the pull and responsibility of profit more so than any sort of ethical dilemma.

His responsibility to his shareholders is an ethical issue. If he makes a decision that affects Google's share price, he's burning other people's money in a big fire, so the effect on the world at large has to be weighed against the effect on shareholders. Of course, if Google had stayed out of censorship in the first place, he wouldn't have to make that

Schmidt may owe his allegiance to the shareholders, but he might also be able to make the case that pulling out of China (for now) in the name of free speech will add so much value to the Google brand that it may be an opportunity not worth missing.

Or at least feels the pull and responsibility of profit more so than any sort of ethical dilemma.

How are you so sure?

Pesky ideals and ethics have no place in corporate America.

I think you're being a bit too cynical with Google. At least thus far, I think they've shown a healthy habit of finding a third way to maintain trust with consumers and build confidence in shareholders. Google isn't in an invulnerable positi

They're walking away from too much money and market to pull out of China.

That's not given. In addition to the meager revenue that Google actual gets in China, you have to take into account government sponsored IP theft. Sounds to me that Google needs to worry about losing its IP to Chinese competitors.

I don't think Chinese leadership is inflexible by western standards. Rather, I think they're completely pragmatic and utilitarian. If Google were to make it worth their while, they'd probably be willing to negotiate, however, I don't think Google's willing to go as far as that takes. "Flexible" is a relative term.

I somewhat doubt it. As big as it is over here, Google is merely an also-ran in the Chinese search engine market, which is dominated by local companies, largest being Baidu reportedly holding 60%+ of the market by itself.

Figures I've see thrown around put the revenue for Google's Chinese operations at about $300 million/year, which is slightly more than 1% of Google's total revenue. Given the amount of hassle they've been having, I'm sure they've been strongly questioning whether that money is worth it.

Will Google stop buying stuff from China.The Nexus 1 is made by HTC probably in China.The iPhone and most of Apples products are made in China so no Google isn't alone.We as a nation need to stop sending our money to China. How about it Google. Take that big monster pile of cash and build some factories in the US.Start making phones and motherboards in the US again. Would you pay $10 more for a Google Motherboard built in Iowa or Idaho over an Asus built in China if it was the same quality?Think of it Google you could pay workers in the US that would then spend that money in the US and buy stuff made in the US "hopefully"How about not just trying to not be evil but trying to be good?

On a more cynical note. Google isn't making a lot of money in China, odds are the Chinese search engine is benefiting from stolen Google tech will get government support, and they could leverage that tech to start going head to head with Google in world markets.So they have nothing really to loose by bailing out of China.

Would you pay $10 more for a Google Motherboard built in Iowa or Idaho over an Asus built in China if it was the same quality?

Personally, I would. I already try to buy products made anywhere but in China - especially anything food or health related - but when it comes to electronics there really isn't a whole lot of choice.

For desktops and laptops, there IS the option of Union Built PC [unionbuiltpc.com] but the machines are only assembled, not actually made, in North America. I have no idea what the quality is like either.

It's also good news for Microhoo. Google, as a publicly traded company, only has the obligation to make a profit for shareholders regardless of their "Do no evil" hooey which, let's face it, once you're publicly traded becomes more of a guideline than a rule. Really, Google wants to increase their market share just like anyone else.

I seriously doubt that they will pull out of China and are just sabre rattling although sabre rattling with the Chinese government is a losing proposition. Microhoo and Baidu s

Chinese Gov: you have to censor, it is the law.Google: ok we follow the law, you dont interfere with our operationChinese Gov: ok.Google: Somebody hacked usChinese police: we dont know what you are talking about and we dont investigateGoogle: that is not nice, we know its something semi-officialChinese Gov: maybe, we dont know nothing

No, seriously. If you cant rely that the police will investigate some crime which endangers your operation, you leave a country. Even if the guy who hacked hacked for a private

The problem with being a totalitarian regime is that you can never, ever, let-up on that boot you have grinding-down upon the necks of the people, even if you want to.Because the moment you do let-up, the people will stand up, and the next thing you know, you're hanging from a lamp post by a meat hook.

You're right that other places have a tighter cultural connection, but you can only ignore an elephant in the room for so long. Google may only be a mouse, but that's enough to make the elephant pretty mad.

I'll bite. I care about China. I care about that one sixth of the world's population developing and coming out of poverty. To a lesser extent, I care about them becoming a serious player in the world market. Right now they play with their money and disrespect their work force beyond belief. It might not make you feel bad to pick up some piece of electronics at Walmart for $20 but I do feel bad when I see "Made in China" and have to think about the health problems the workers might develop... the environmental damage the plant might create... the plant's drinking water problems from the lead... the list goes on. In order to solve these problems, people have to be unafraid to speak up. People need a method for improving these conditions -- however slowly it might come. They don't have that. Removing government censorship mandates is one step toward that. Yeah it's a slow process and it might not seem like much to you but it is to me.

These are topics much closer to home with a much greater impact on us.

I've tried to shake the "East Versus West" mentality as much as possible, it's sad to see it lingers on in some form. All countries are members of the world. Just because one country speaks the same language you do and has the same form of government you do shouldn't make it anymore or less important to you than another country with differences. China's population might even make it more important than Australia to me. You seem to have some very strange misconceptions about allegiances to countries that are disconnected from you. They hold no domain over you whether they're Australia or China. I certainly expect more of my representatives than to say "it's written into law in Australia, it should be in our law here." This "because everyone else is doing it" does not suffice as an argument where I live. Look at the Scandinavian nations that have taken different routes on copyright. It's okay to have different laws in different countries.

What a bunch of Google execs will do with a handful of employees in China... not so much.

I would wager that the precedent this public display sets will have far more implications for you (and what you consume) than Australia's "Think of the Children" campaign.

We all have to remember that China is probably the last remaining "empire" - until very recently (historically), they've been nothing but a feudal civilization, dominated by emperors from afar. It's going to take a generation or two to evolve to something like what Hong Kong enjoyed under British colonial rule.

"We will no longer be loaning either the US or EU any more money. Furthermore we've decided it's time to collect our 5 trillion in loans. If you don't have the money, we'll be happy to take Alaska and Spain as payment instead."

The loans are not callable.And the limit of our liability is whatever assets are in their countries.

China has bought trillions to keep their currency from appreciating. When they stop buying, the currency appreciates anyway and those trillions in purchases lose significant value. So yea, they are going to lose trillions of bucks whatever they do.

In the meant time, the US got cheap goods and they got jobs and a chance to build infrastructure.

Who cares about China. Seriously. What happens there with Google affects most of us absolutely not at all....

What direction is the censorship, privacy, and IP situation in the UK going?

Firstly, how hard would it have been to not click the title that clearly shows this is about Google in China if you don't care?
Secondly, many people feel developments like this are important. It's incredibly hard to predict with any accuracy what will be important geopolitically any distance into the future, but the

That's all well and good except for every lawyer's favorite word: Precedent.

When, and sadly it's looking more and more like when rather than if, the western governments start stepping up the level of access they want to google's data, Google can pull out that giant trump card of calling said government's policies socialist and horrifyingly invasive, taking a moral (and populist) stand against the evils government oppression by comparing said government to China. (while conveniently forgetting the whole argu

but whatever their reasons are for leaving (either humanitarian or because they got hacked)

One would hope these reasons had something to do with it, but I'm inclined to think the limited market share verse cost has something to do with it as well. Google China is a huge money pit for Google, and they can always return at a later date.

I doubt that they seriously expected China to exempt them from censorship. They just felt they had to make the gesture. This way Google can say "We tried to work something out" while China looks inflexible.

Yeah, but it's also nice to be able to recognize the shills and nutters. Whenever I read a report or analysis written by Enderle, Lyons or Didio I immediately consider the opposite of whatever they claim might be true. Whenever I hear anything written by O'Gara I assume it's outlight lies and spin.